AddedRisk Factors
•Our ability to use net operating losses and tax credit carryforwards may be limited by an ownership change
TTWOTake-Two Interactive
We are a leading developer, publisher, and marketer of interactive entertainment for consumers around the globe. 10-K, Item 1
- Employees
- 9,998
- Headquarters
- New York, NY
- CEO
- Strauss Zelnick
- Next results
- around Feb 2, 2027
10-K 0001628280-26-037434 (2026-05-22) vs 10-K 0001628280-25-026694 (2025-05-20)
| Section | Compared text | Words now | Changed |
|---|---|---|---|
| Risk Factors | Item 1A | 25,339 | 14.8% |
| MD&A | Item 7 | 5,381 | 26.5% |
| Legal Proceedings | Item 3, via Note 14 – COMMITMENTS AND CONTINGENCIES | 358 | 0.0% |
| Accounting Policies | 10-K text, Note 1 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | 7,305 | 10.7% |
The redline: what was cut and what was added
In each section, the paragraph that changed most, marked against last year's 10-K:
cut words struck through, new words highlighted and underlined.
Risk Factors 269 words changed in this paragraph; it is 41% similar to last year's version.
Source: Item 1A, 10-K 0001628280-26-037434 vs Item 1A, 10-K 0001628280-25-026694
Accounting Policies 177 words changed in this paragraph; it is 38% similar to last year's version.
We determine if an arrangement is a lease at contract inception. If there is an identified asset in the contract (either explicitly or implicitly) and we have control over its use, the contract is (or contains) a lease. In certain of our lease arrangements, primarily those related to our data center arrangements, judgment is required in determining if a contract contains a lease. For these arrangements, there is judgment in The assessment involves evaluating if the arrangement provides us with an asset that is physically distinct, or that represents substantially all of the capacity of the asset, and if we have the right to direct the use of the asset. Lease assets and liabilities are recognized based on the present value of future lease payments over the lease term at the commencement date. Included If there is an identified asset in the lease liability are future lease payments that are fixed, in-substance fixed, contract (either explicitly or payments based on an index or rate known at implicitly) and we have control over its use, the commencement date contract is (or contains) a lease. This assessment is required for certain of the lease. Variable lease payments are recognized as lease expenses as incurred. The operating lease right-of-use (“ROU”) asset also includes any lease payments made prior our arrangements, primarily those related to commencement, initial direct costs incurred, and lease incentives received. our data centers.
Source: 10-K text, Note 1 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES, 10-K 0001628280-26-037434 vs 10-K text, Note 1 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES, 10-K 0001628280-25-026694
MD&A 156 words changed in this paragraph; it is 62% similar to last year's version.
Net revenue from mobile increased by $194.0 $391.0 and accounted for 52.2% 50.1% of our total net revenue in the fiscal year ended March 31, 2025, 2026, as compared to 51.4% 52.2% in the prior year. year period. The increase was primarily due to an increase in driven by higher net revenue from Match Factory! Color Block Jam and Toon Blast. These increases were partially offset by a decrease in our Grand Theft Auto franchise, Merge Dragons!, and as a result of a divestiture. Net revenue from console games decreased increased by $68.2 $498.2 and accounted for 37.3% 39.0% of our total net revenue in the fiscal year ended March 31, 2025, 2026, as compared to 40.5% 37.3% in the prior year. year period. The decrease increase was primarily due to a decrease in driven by higher net revenue from our Grand Theft Auto and NBA 2K franchises, and LEGO 2K Drive, which released in May 2023. These decreases were partially offset by an increase in net revenue from TopSpin 2K25, which released in April 2024, and our Sid Meier's Civilization franchise. Borderlands franchises. Net revenue from PC and other increased by $158.2 $133.6 and accounted for 10.5% 10.9% of our total net revenue in the fiscal year ended March 31, 2025, 2026, as compared to 8.1% 10.5% in the prior year. year period. The increase was primarily due to an increase in driven by higher net revenue from our Borderlands, Grand Theft Auto, and NBA 2K franchises, partially offset by lower net revenue from our Sid Meier's Civilization franchise; our Risk of Rain franchise, which was acquired in connection with our acquisition of Gearbox in June 2024 (refer to Note 20 - Acquisitions); and our Grand Theft Auto and NBA 2K franchises. franchise.
Source: Item 7, 10-K 0001628280-26-037434 vs Item 7, 10-K 0001628280-25-026694
Every change, by type
Sentences and paragraphs of TTWO's Risk Factors and MD&A, 10-K 2026-05-22 against 10-K 2025-05-20. Each links to the text at sec.gov.
Quiet changes are sentences kept from last year with one to four words changed, at least one of them a hedge, a modal or a qualifier
(may, could, will, not, significant, material…). A year or date rolling forward is not counted.
The full word list
adverse, adversely, all, although, anticipate, anticipates, any, approximately, believe, believes, can, cannot, certain, could, expect, expects, generally, however, if, intend, intends, largely, likely, many, material, materially, may, might, most, must, never, no, not, possible, primarily, probable, should, significant, significantly, some, substantial, substantially, unlikely, will, would
AddedRisk Factors
The AI regulatory landscape is evolving, and we may be required to dedicate additional operational and financial resources to ensure compliance with new legal requirements. For instance, the European Union ("E.U.") Artificial Intelligence Act entered into force in August 2024, with some provisions becoming enforceable between February 2025 and August 2027, subject to a likely delay of the Act's high-risk enforcement until December 2027. In the U.S., some states have enacted general purpose AI laws, while others have enacted use-case specific AI laws; other states may enact similar laws in the future, which will add complexity to our compliance efforts. This uncertainty may require additional investments in oversight and the development of protections and safeguards to ensure compliance, including to the extent any personal information is processed by such technologies.
AddedRisk Factors
However, even with safeguards and oversight in place, the development and deployment of AI technologies may nevertheless pose risks. For example, our employees, contractors, vendors, or other partners may use AI tools in ways that are inconsistent with our policies or expectations, including by entering confidential, proprietary, personal, or regulated information into third-party AI services, and some AI providers may have limited operating histories or governance processes, any of which could compromise our information, expose us to legal or regulatory claims, or harm our reputation. Additionally, the data sets used to train the underlying models may be flawed, the AI tools may function in an unexpected manner, or generate biased, incorrect, or inappropriate content, which could negatively impact the performance or perception of our products and brand, incur regulatory scrutiny, or impose legal liability. Further, intellectual property ownership surrounding AI technologies has not been fully addressed by U.S. courts or other federal or state laws or regulations, and the use or adoption of third-party AI technologies into our products and services may result in exposure to claims of copyright infringement, other intellectual property misappropriation, or uncertainty regarding copyright ownership of AI-generated assets.
AddedRisk Factors
While the impact of AI on our industry is still emerging and uncertain, to the extent our competitors successfully implement AI technologies into their products or services more effectively or efficiently than we do, are able to imitate or compete more easily with our products, or if we fail to anticipate and respond to changing industry standards or consumer demand, or experience delays in integrating these technologies into our operations, we may face significant risks to our competitive position, financial performance, and long-term growth prospects.
AddedRisk Factors
Our vendors, service providers, business partners, and software supply chain may also experience disruptions, be subject to attacks, or have compromised security, which may result in future security incidents and breaches, and otherwise adversely impact our ability to provide our products and services.
AddedRisk Factors
Our continued success will depend to a significant extent on our senior management team and our relationship with ZMC Advisors, L.P. ("ZMC"). Our Executive Chairman/Chief Executive Officer and President are partners of ZMC. We are
AddedRisk Factors
Certain of our products are based on or incorporate intellectual property owned by others. For example, certain of our 2K products include rights licensed from major sports leagues and players' associations. Similarly, some of our other titles are
AddedRisk Factors
monitoring program and pay a fine of $20 million. Also, we may be subject to civil claims and regulatory actions alleging our games, including social casino games, violate certain state laws concerning unfair or deceptive acts or practices in conduct of any trade or commerce or certain state gambling laws.
AddedRisk Factors
or when. Any such new or amended privacy laws may add complexity to our compliance efforts and require us to expend additional financial or other resources as a result.
AddedRisk Factors
common stock, which, under certain circumstances, could reduce the market price of our common stock and the value of any outstanding notes.
AddedRisk Factors
On July 4, 2025, the One Big Beautiful Bill Act ("OBBB") was signed into law. OBBB includes significant provisions, including but not limited to (1) permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act of 2017 ("TCJA"), (2) modifications to the international provisions relating to Base Erosion Anti Abuse Act ("BEAT"), Global Intangible Low-Tax Income ("GILTI") and Foreign Derived Deduction Eligible Income ("FDDEI"), (3) permanent reinstatement deduction for domestic research expenditures and 100% bonus depreciation for certain qualified property, and (4) modifications to tax credits. The legislation has multiple effective dates, with certain provisions effective in the fiscal year ended March 31, 2026 and others implemented in future periods. We have estimated the accounting for income tax effects of the OBBB, which reduced our estimated U.S. cash tax liability. It did not, however, impact our U.S. deferred tax assets or liabilities since we continue to maintain a full valuation allowance against U.S. net deferred tax assets. We are continuing to evaluate the impact of OBBB on the Company. It is possible that these changes could have an adverse impact on our effective tax rate, tax payments, financial condition, or results of operations. The new tax law is complex and additional interpretive guidance may be issued that could affect the interpretations and assumptions we have made, as well as actions we may take as a result of OBBB.
AddedRisk Factors
not yet enacted Pillar Two legislation, it is possible that Pillar Two could have an adverse impact effective tax rate, tax payments, and financial condition in future periods.
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RewordedRisk Factors
Further, our effective tax rate or tax payable could be adversely affected by a variety of factors, including changes in the business, the mix and level of earnings between countries with differing statutory tax rates, changes in the realizability of deferred tax assets, changes in the availability of local tax incentives and production tax credits, changes in legislation that could scale back or eliminate tax credits for software development (which have benefitted our results in the past and whose benefits could be lessened or eliminated through such legislation in the future), changes in tax elections, and changes in applicable tax laws.
RewordedRisk Factors
Future acquisitions and investments could also involve result in the issuance of our equity and or equity-linked securities (potentially diluting securities, which may potentially dilute our existing stockholders), stockholders, or the incurrence of debt, contingent liabilities or amortization expenses, write-offs of goodwill, intangibles, or acquired in-process technology, or other increased cash and non-cash expenses such as stock-based compensation. additional debt.
RewordedRisk Factors
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If we have disputes with external developers or they cannot meet product development schedules, acquire certain approvals or are otherwise unable or unwilling to honor their obligations to us, we may delay or cancel previously announced games, alter our launch schedule or experience increased costs and expenses, which could result in a delay or significant shortfall in anticipated revenue, harm our profitability and reputation, and cause our financial results to be materially affected.
RewordedRisk Factors
Further, any such transaction may involve the risk that our senior management’s attention will be excessively diverted from our other operations, the risk that our industry does not evolve as anticipated, and that any intellectual property or personnel skills acquired do not prove to be those needed for our future success, and the risk that our strategic objectives, cost savings or other anticipated benefits are otherwise not achieved.
RewordedRisk Factors
We cannot predict how this these or other age-based obligations imposed on providers of online services may affect our compliance efforts going forward, and whether they will result in industry-wide changes to online services available to child and teen players. players; however, they may impact our financial position or operations to the extent that we are required to modify our practices, policies, products, or services as a result.
RewordedRisk Factors
If our competitors develop more successful products or services at lower price points or based on payment models perceived as offering better value, or if we do not continue to develop consistently high quality and well-received products and services, our revenue and profitability may decline.
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For instance, the California Age-Appropriate Design Code Act took effect in July 2024; however, as of March 2025, the California Attorney General has been enjoined from enforcing the act on First Amendment grounds. 2024.
RewordedRisk Factors
The ability of our Board to create and issue a new series of preferred stock and certain provisions of Delaware law, our certificate of incorporation and bylaws could impede a merger, takeover or other business combination involving us or discourage a potential acquirer from making a tender offer for our common stock, which, under certain circumstances, could reduce the market price of our common stock and the value of any outstanding notes.
RewordedRisk Factors
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Information technology system disruptions, network failures, or security breaches (including the Cybersecurity Incident and similar incidents) cybersecurity incidents impacting us or our vendors, service providers, business partners, or software supply chain) have negatively affected, and in the future could negatively affect our business continuity, operations, financial results, and the reliability and stability of our products and services.
AddedMD&A
achieve the desired return on our investments in product development. Accordingly, our strategy for these platforms is to focus our development efforts on a select number of the highest quality titles.
AddedMD&A
Fiscal Year Ended March 31, 2026 2025 Increase/(decrease) Increase/(decrease) % Net Bookings $ 6,721.0 5,648.0 $1,073.0 19.0%
AddedMD&A
amortization of intangible assets primarily due to higher impairments in the prior year and (ii) lower product costs as a percentage of net revenue, partially offset by higher amortization of capitalized software and development costs primarily due to the timing of releases.
AddedMD&A
The accounting for tax incentives and credits may increase or decrease our effective tax rate due to changes in tax legislation and elections we may make.
AddedMD&A
On July 4, 2025, the One Big Beautiful Bill Act ("OBBB") was signed into law. OBBB includes significant provisions, including but not limited to (1) permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act of 2017 ("TCJA"), (2) modifications to the international provisions relating to Base Erosion Anti Abuse Act ("BEAT"), Global Intangible Low-Tax Income ("GILTI") and Foreign Derived Deduction Eligible Income ("FDDEI"), (3) permanent reinstatement deduction for domestic research expenditures and 100% bonus depreciation for certain qualified property, and (4) modifications to tax credits. The legislation has multiple effective dates, with certain provisions effective in the fiscal year ended March 31, 2026 and others implemented in future periods. We have estimated the accounting for income tax effects of
AddedMD&A
the OBBB, which reduced our estimated U.S. cash tax liability. It did not, however, impact our U.S. deferred tax assets or liabilities since we continue to maintain a full valuation allowance against U.S. net deferred tax assets. We are continuing to evaluate the impact of OBBB on the Company. It is possible that these changes could have an adverse impact on our effective tax rate, tax payments, financial condition, or results of operations. The new tax law is complex and additional interpretive guidance may be issued that could affect the interpretations and assumptions we have made, as well as actions we may take as a result of OBBB.
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Research and development expenses increased by $57.0 $69.4 for the fiscal year ended March 31, 2025, 2026, as compared to the prior year period, primarily driven by (i) higher personnel expense due to increases the acquisition of Gearbox in (i) personnel expenses due to increased headcount June 2024 and higher performance-based compensation, and (ii) production and development expenses for titles that are not technologically feasible, partially offset by the timing of tax additional R&D-related credits related credits for to certain titles.
RewordedMD&A
Depreciation and amortization expenses increased decreased by $58.2 $30.9 for the fiscal year ended March 31, 2025, 2026, as compared to the prior year period, primarily driven by lower amortization related to intangible assets due to increases in (i) impairment expense related to our intangible assets (refer to Note 9 - Goodwill and Intangible Assets, Net), (ii) prior year impairments, partially offset by higher IT infrastructure expense, expense and (iii) higher leasehold improvements improvement expense for office buildouts.
RewordedMD&A
Our operating loss for the fiscal year ended March 31, 2025 2026 was $4,391.1 $104.2 compared to operating loss of $3,590.6 $4,391.1 for fiscal year ended March 31, 2024, 2025, primarily due to an increase in driven by Goodwill impairment charges of $1,203.1 related to an additional partial impairment related to one $3,545.2 in the prior year, with no corresponding expense in the current year, as well as, higher sales of our reporting units. products.
RewordedMD&A
We had three customers who accounted for 22.7%, 21.0%, and 14.0% of our gross accounts receivable as of March 31, 2026, and three customers who accounted for 24.0%, 21.3%, and 15.7% of our gross accounts receivable as of March 31, 2025, and three customers who accounted for 21.8%, 18.1%, and 16.9% of our gross accounts receivable as of March 31, 2024. 2025.
RewordedMD&A
When compared to the statutory rate of 21%, the effective tax rate of 0.3% (50.8)% for the fiscal year ended March 31, 2025 2026 was primarily due to driven by an expense of $718.0 from nondeductible goodwill impairments, $222.7 $113.4 from an increase in the U.S. valuation allowance expense, $25.5 $18.2 from an increase in the foreign valuation allowance expense, $41.4 and $79.0 from our geographic mix and foreign earnings earnings, partially offset by a $54.5 $45.7 benefit from tax credits anticipated to be utilized. and $39.7 of excess benefits from employee stock compensation.
RewordedMD&A
This net increase was partially offset by (i) the decrease in Net cash used in investing activities, which was primarily due to the purchase of short-term investments and fixed assets and (ii) Net cash used in operating activities, which was primarily due to investments in software development and licenses, partially offset by sales of our products. assets.
RewordedMD&A
The increase was also primarily due to Net cash provided by financing activities, primarily related to proceeds from May 2025 underwritten public offering of common stock (refer to Note 12 - Loss Per Share), partially offset by the issuance repayment of our 2029 2025 Notes and 2034 2026 Notes (refer to Note 11 - Debt) and the issuance of common stock. Debt).
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The following table sets tables set forth, for the periods indicated, our statements Consolidated Statements of operations, Operations, net revenue by platform, net revenue by distribution channel, and net revenue by content type, net revenue by platform, and net revenue by distribution channel: type:
RewordedMD&A
Selling and marketing expenses increased by $133.5 $87.1 for the fiscal year ended March 31, 2025 2026 as compared to the prior year period, primarily driven by higher personnel expense due to (i) higher overall performance-based compensation, as well as, higher marketing expenses expense for Match Factory!, Game of Thrones: Color Block Jam and our Borderlands franchise.
RewordedMD&A
Our net revenue for the fiscal year ended March 31, 2025 2026 was led by a variety of our top franchises, primarily NBA 2K, Grand Theft Auto, Borderlands, Red Dead Redemption, and WWE 2K, and Sid Meier's Civilization, as well as our top contributors mobile contributors, primarily Toon Blast, our hyper-casual mobile portfolio, Match Factory!, Empires & Puzzles, Match Factory!, and Words With Friends. Color Block Jam.
RewordedMD&A
Basic weighted average shares of 175.1 183.9 were 5.0 8.8 higher as compared to the prior year period basic weighted average shares, primarily due to stock issued as consideration for the acquisition our May 2025 underwritten public offering of Gearbox, common stock, as well as normal stock compensation activity, including vests as well as grants vests, grants, and forfeitures in the prior year being fully outstanding in the current year.
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